Pakistan has experienced a notable expansion in its monetary base as broad money (M2) reached 42.64 trillion rupees as of April 24, 2026. According to the latest figures released by the State Bank of Pakistan (SBP), the money supply rose by 178.91 billion rupees on a week-over-week basis. When analyzed against the figures from June 2025, M2 has grown by a substantial 2.13 trillion rupees from the 40.51 trillion rupees recorded at the close of the previous fiscal year. This upward trajectory in the most widely used measure of money supply indicates a significant injection of liquidity into the national economy over the last ten months, reflecting both inflationary trends and shifts in the domestic financial landscape.
A deeper look into the components of broad money reveals a slight shift in the way liquidity is being held by the public. The currency in circulation within the economy fell by 99.08 billion rupees during the week ending April 24 to settle at 11.75 trillion rupees. Despite this weekly decline, the total currency in circulation for the current fiscal year has still increased by 1.11 trillion rupees compared to the 10.63 trillion rupees noted in June 2025. As a percentage of the total M2, currency in circulation now stands at 27.56 percent, which is a slight decrease from the 27.91 percent recorded a week prior but remains higher than the 26.25 percent ratio seen in June 2024. This fluctuation suggests a slight seasonal movement of funds back into the formal banking system.
The growth in M2 during the week was primarily driven by a surge in bank deposits, which reached a total of 30.85 trillion rupees. The data shows an increase of 282 billion rupees in deposits on a week-over-week basis, representing a cumulative rise of 1.03 trillion rupees for the fiscal year to date. It is important to note that these figures exclude inter-bank deposits as well as deposits held by government entities and foreign constituents. The steady rise in deposits indicates a growing confidence in the formal financial sector and perhaps the impact of higher interest rates attracting savings from the private non-government sector.
In the Pakistani context, M2 is measured from two distinct sides to provide a comprehensive view of the monetary environment. From the liability side, it encompasses the sum of currency in circulation, total deposits of the non-government sector (including resident foreign currency deposits), and other specialized deposits with the State Bank. On the asset side, M2 is calculated as the sum of net domestic assets (NDA) and net foreign assets (NFA) held within the broader banking system, which includes both the central bank and all scheduled commercial banks. This dual measurement allows policymakers to track the origin of money supply growth and assess its potential impact on the national inflation rate.
The relationship between currency in circulation and total deposits remains a critical metric for the State Bank of Pakistan as it manages monetary policy. Currency in circulation represents the physical banknotes and coins held by the general public and various financial institutions, while deposits represent the digital and account-based liquidity available for lending and investment. The recent data suggests a healthy balance between physical cash and bank-held assets, although the overall expansion of the money supply continues to be a point of focus for those monitoring macroeconomic stability. As the fiscal year moves toward its conclusion, the management of M2 will remain essential in controlling the velocity of money and ensuring that the financial system remains adequately capitalized to support industrial and commercial growth.
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